Tonichi Kyosan Cable to Double Profits for Optical Product

Tonichi Kyosan Cable, the subsidiary of Hitachi Cable, aims to grow up the optical products business related to broadband transmission and the cable assembly business as the next profit cores following its main business of 600 volt CV cable (cross-linked polyethylene insulated power cable with vinyl sheath). Kazuhiro Harada, president of Tonichi Kyosan Cable, said the firm aimed to increase the profit ratio of optical products from current 10% to 20% toward fiscal 2008 ending March 2009.Tonichi Kyosan Cable posted 35.9 billion yen of net sales and 580 million yen of recurring profit in fiscal 2005. The sales increased by 25% from fiscal 2004 and the profit to 4.8 times. The firm could gain much profit recovery by significant reorganization of the production systems and the staff reduction in fiscal 2004-2005 along its management revitalization plan called ‚ÄúTonichi Kyosan Survival Plan” from September 2004 to March 2007.The 600V CV cable represents 50-60% of total sales of Tonichi Kyosan Cable. In fiscal 2004-2005 the firm integrated CV cable production from Fujishiro Plant to Ishioka plant, both of which are located in Ibaraki Prefecture, Japan. Then the firm reorganized the productive lines at Ishioka plant and established the output system to produce 3,000 tonnes of CV cable per month at lower costs. The firm also implemented cooperative material procurement with Hitachi Cable and the improvement of physical distribution in order to improve the profitability of the business.Tonichi Kyosan Cable posted 4.8 billion yen of sales in fiscal 2005 for the optical products business including optical cable, optical code with connectors and optical network components. The firm aims to double the profit for the optical products business toward fiscal 2008 as the profit core next to 600V CV cable, while the sales value for the optical products would not increase so much in 3 years.